Kathmandu. The question has arisen whether or not action will be taken against Nepal Securities Board Chairman Santosh Narayan Shrestha after he was accused of demanding up to 7 percent commission in the IPO approval case of hydropower companies.
The Independent Power Producers Association (IPPAN) has publicly accused the chairman and his group of demanding commission for IPO issuance through intermediaries. After the allegations were made publicly and institutionally, discussions have also been held between high-ranking officials in the Finance Ministry. Sources said that Finance Minister Bishnu Prasad Poudel has already held preliminary discussions with the Finance and Revenue Secretaries. Should he be taken against him or not? Can the Securities Board move forward under his leadership or not? Sources claim that discussions are underway on various options, including suspending or forcing him to resign.
The option of transferring the powers exercised by Chairman Shrestha to the board of directors in the first phase has also been put forward. It seems that preparations are underway to take away the IPO approval authority previously given to Board Chairman Shrestha and bring it back to the board of directors.
‘The board chairman has been publicly questioned, other decisions including the IPO issuance have also been seen as suspicious, what to do now? What could be the path of investigation? I understand that there has been a discussion.’ A Finance Ministry source said.
How will some directors now participate in the meeting chaired by Shrestha? They have also asked. ‘An organization like IPPAN has raised questions about publicly asking for commission, now how can they participate in a board meeting led by the same person? There has been a conversation between some directors saying. The government has made the appointment, let the government think about the rest.’, the source said.
Authorities are also vigilant
The Commission for the Investigation of Abuse of Authority has also shown interest in the commission case in the IPO. The issue of publicly asking for commission from the head of a regulatory body has been raised, what will the authority do? In response to a question from Singha Durbar, Authority spokesperson Rajendra Kumar Poudel said, “We have already looked into the issues that have come up in the media. If there is a complaint with facts, the Authority will investigate it.”
Public Accounts Committee Chairman Hrishikesh Pokharel said that he himself had questioned why the IPOs of companies with a net worth of more than 90 were stopped. “It is impossible to say anything without understanding many issues, but the IPOs of companies with a net worth of more than 90 have also been stopped, why? I have been asking myself, the committee can only say something about the commission after further study,” Chairman Pokharel told Singha Durbar.
The board of the top leadership has been stopping the IPOs of hydropower companies, citing the directives of the Public Accounts Committee. The Accounts Committee had directed that companies with net worths of less than 90 should not be allowed to issue IPOs. However, the board leadership has been accused of bargaining for commissions by not allowing companies with net worths of more than 90 to issue IPOs.
Recently, the Independent Power Producers Association (IPPAN) has launched an institutional protest after middlemen started demanding up to 7 percent commission in the name of the board chairman.
However, the board had published a statement denying the accusation of demanding commission. Board spokesperson Niranjay Ghimire has issued a statement accusing those who are alarmed by market reform efforts of spreading false information.
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